Biodiversity threat to business is bigger than climate change

PwC analysis shows less than one in five companies, including many UK household names, see biodiversity as an important business issue.

The Economics of Ecosystems and Biodiversity (TEEB) is a two-year study led by the UN Environment Programme and funded by the European Commission and Governments including Germany, Norway and the UK. It examines the economics of biodiversity and ecosystem loss for business arguing that businesses have an economic interest in protecting nature and, in some cases, should see it as opportunity for new activity.

The UN defines biodiversity as "the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems".

Biodiversity is decreasing at an alarming rate, however. Since 1970, 30 per cent of the animal population has become extinct, while the coverage of living corals has reduced by 40 per cent.

The global economic impact of biodiversity loss is estimated at between £1-3 trillion annually or up to 7.5 per cent of global GDP.

Speaking at the first Global Business of Biodiversity symposium in London, where today’s report was launched, PwC said UK business needed to prepare for "nature biting back".

"Current business strategies and plans in the UK are biting the hand that feeds stable consumer prices, business prospects and long term investor security and returns," said Malcolm Preston, CEO, sustainability and climate change, PwC.

PwC warned no UK sector or business will escape unaffected by changes and availability of biodiversity and ecosystem 'services’. Such services include water used in food and drink production, timber for packaging, furniture and paper, productive land for fruit and vegetables, and fibres for clothes.

Jon Williams, partner, sustainability and climate change at PwC, said businesses should to start viewing ecosystems as "an extension of their asset base" as the scrutiny of big business and its impacts on the world’s 'natural capital’ is likely to intensify as better evaluations and assessments come to the fore.

"The UK’s access to, and use of environmental resources in locations from local farms in Suffolk to rainforests in south America, is like an international warehouse of assets that no-one has priced or got an inventory for," he said.

PwC highlights five blind spots’ for UK businesses to focus on when it comes to biodiversity. These include corporate reporting to reflect changes to how resources are considered to the business’s future; unpredictability in supply chain pricing and availability; greater awareness among consumers about biodiversity loss, leading to changes in consumer preferences and purchasing decisions; investors factoring in more value for resources that supply and sustain businesses and funds they are investing in, and new environmental regulation, tax and subsidy reforms taking into account biodiversity.